MOTIVATION MOTIVATION

Concepts and RewardsConcepts and Rewards

MOTIVATION DEFINEDMOTIVATION DEFINED

Willingness to exert high levels of effort to Willingness to exert high levels of effort to reach organizational goals.reach organizational goals.

BASIC ASSUMPTIONS

Everyone is motivatedEveryone is motivated Key?Key?

Two types of motivationTwo types of motivation IntrinsicIntrinsic ExtrinsicExtrinsic

TYPES OF MOTIVATION

Extrinsic Motivation:Extrinsic Motivation: "What gets rewarded gets done""What gets rewarded gets done" Based on extrinsic/tangible rewardsBased on extrinsic/tangible rewards

Intrinsic Motivation:Intrinsic Motivation: "What is rewarding gets done""What is rewarding gets done" Based on intrinsic/intangible rewardsBased on intrinsic/intangible rewards

Motivation TheoriesMotivation Theories

Need (Maslow & ERG)Need (Maslow & ERG) EquityEquity ReinforcementReinforcement Expectancy TheoryExpectancy Theory Goal-Setting TheoryGoal-Setting Theory

Needs (stage of development)

MaslowMaslow Self actualizationSelf actualization Self esteemSelf esteem Social (love)Social (love) SafetySafety PhysiologicalPhysiological

Alderfer (ERG)Alderfer (ERG) GrowthGrowth RelatednessRelatedness ExistenceExistence

NEED THEORIES OF MOTIVATIONNEED THEORIES OF MOTIVATION

What are the implications of need-based What are the implications of need-based theories for managers?theories for managers?

TODAY’S TOPICTODAY’S TOPIC

MotivationMotivation

EQUITY THEORYEQUITY THEORY

People compare their People compare their outcome/input ratio to outcome/input ratio to that of othersthat of others

ConclusionsConclusions Ratios are equal Ratios are equal

(equity exists)(equity exists) Ratios are unequal Ratios are unequal

(inequity exists)(inequity exists)

RESPONSES TO EQUITY/INEQUITYRESPONSES TO EQUITY/INEQUITY

Equity: MaintenanceEquity: Maintenance Inequity:Inequity:

Change InputsChange Inputs Change OutcomesChange Outcomes QuitQuit

Forms of JusticeForms of Justice

REINFORCEMENT THEORYREINFORCEMENT THEORY

Behavior is a function Behavior is a function of consequencesof consequences

Behavior that is Behavior that is rewarded persistsrewarded persists

To increase behaviorTo increase behavior Positive reinforcementPositive reinforcement negative reinforcementnegative reinforcement

REINFORCEMENT THEORYREINFORCEMENT THEORY

To reduce behaviorTo reduce behavior ExtinctionExtinction PunishmentPunishment

Immediacy is crucialImmediacy is crucial Implications?Implications?

REWARDING B

BUT WE BUT WE REWARD:REWARD:

WE HOPE FOR:WE HOPE FOR: Long-term growthLong-term growth Setting challenging Setting challenging

goalsgoals Total QualityTotal Quality CandorCandor

TeamworkTeamwork

EXPECTANCY THEORYEXPECTANCY THEORY

People are motivated to do that which they People are motivated to do that which they believe is believe is possiblepossible and and valuablevaluable

Expectancy: Belief that you can performExpectancy: Belief that you can perform Instrumentality: Belief that performance Instrumentality: Belief that performance

will lead to an outcomewill lead to an outcome Valence: Value of the outcomeValence: Value of the outcome

EXPECTANCY THEORYEXPECTANCY THEORY

According to expectancy theory, what must According to expectancy theory, what must managers do to motivate their employees?managers do to motivate their employees?

GOAL SETTING THEORYGOAL SETTING THEORY

People naturally set goalsPeople naturally set goals Benefits of Goals:Benefits of Goals:

Increase effortIncrease effort Direct effortDirect effort Increase persistenceIncrease persistence

Most effective goals are:Most effective goals are:

Making MBO Work:SMARTER GoalsMaking MBO Work:SMARTER Goals

S S MM

Improve conflict management process vs.Improve conflict management process vs. 80% reduction in grievances filed by second quarter80% reduction in grievances filed by second quarter

AA RR TT EE RR

Motivation TheoriesMotivation Theories

Need (Maslow & ERG)Need (Maslow & ERG) EquityEquity ReinforcementReinforcement Expectancy TheoryExpectancy Theory Goal-Setting TheoryGoal-Setting Theory

Effective Rewards & Incentive Systems:Effective Rewards & Incentive Systems:

NORDSTROMSNORDSTROMS

Using theories of motivation & related keys to Using theories of motivation & related keys to effective incentive systems, evaluate the Incentive effective incentive systems, evaluate the Incentive system in place at Nordstroms.system in place at Nordstroms. What do you see as its strengths?What do you see as its strengths? Any concerns/questions regarding the system? Any concerns/questions regarding the system?

Are Nordstrom employees pressured Are Nordstrom employees pressured inappropriately by the sales-per-hour system? By inappropriately by the sales-per-hour system? By management?management?

What (if any) changes would you recommend? What (if any) changes would you recommend?

NORDSTROMSNORDSTROMS

Using theories of motivation & related keys Using theories of motivation & related keys to effective incentive systems, evaluate the to effective incentive systems, evaluate the Incentive system in place at Nordstroms.Incentive system in place at Nordstroms. What do you see as its strengths?What do you see as its strengths?

NORDSTROMS

““This is Your Business. Treat This is Your Business. Treat it Like Your Own Business.”it Like Your Own Business.”

Highest sales productivity Earnings > $80,000 Compound growth in sales,

earnings, stores sq. ft. Highly, educated workforce

NORDSTROMSNORDSTROMS

Using theories of motivation & related keys Using theories of motivation & related keys to effective incentive systems, evaluate the to effective incentive systems, evaluate the Incentive system in place at Nordstroms.Incentive system in place at Nordstroms. What do you see as its strengths?What do you see as its strengths? Any potential concerns? Any potential concerns?

NORDSTROMS

“It’s fear that Provides Great Customer Service”

Local 1001 publicity campaign Union complaint with

Washington Dept. L & I NLRB charges $15 million reserve against

earnings shareholder class action suit employee class action suit Wall Street Journal story 60 Minutes TV story

““This is Your Business. Treat This is Your Business. Treat it Like Your Own Business.”it Like Your Own Business.”

Highest sales productivity Earnings > $80,000 Compound growth in sales,

earnings, stores sq. ft. Highly, educated workforce

NORDSTROMSNORDSTROMS

Are Nordstrom employees pressured Are Nordstrom employees pressured inappropriately by the sales-per-hour inappropriately by the sales-per-hour system? By management?system? By management?

NORDSTROMS

ACTIVITY SELL NONSELL Drive to another store to pick up merchandise for a customer

Home delivery

Obtain merchandise from another department for a customer

Thank you notes

Merchandise stocking

Store displays

Sales meetings

Inventory count

Record keeping

NORDSTROMSNORDSTROMS

Using theories of motivation & related keys to Using theories of motivation & related keys to effective incentive systems, evaluate the Incentive effective incentive systems, evaluate the Incentive system in place at Nordstroms.system in place at Nordstroms. What do you see as its strengths?What do you see as its strengths? Any concerns/questions regarding the system? Any concerns/questions regarding the system?

Are Nordstrom employees pressured Are Nordstrom employees pressured inappropriately by the sales-per-hour system? By inappropriately by the sales-per-hour system? By management?management?

What (if any) changes would you recommend? What (if any) changes would you recommend?